Japan’s wages slumped at a near- record pace in December as employers pared workers’ bonuses, an indication that consumer spending is unlikely to drive the economic recovery.
Monthly wages including overtime and bonuses slipped 6.1 percent from a year earlier to 549,259 yen ($5,056), the Labor Ministry said today in Tokyo. Paychecks slumped an unprecedented 7 percent in June.
“You have to weigh the improvements in jobs against the plunge in wages,” [Azusa] Kato, an economist at BNP Paribas in Tokyo, said before the report was released. “As long as workers’ incomes keep plummeting like this, households won’t feel the benefits of this economic recovery firsthand.”
The decline in paychecks was the 19th in a row, extending the longest losing streak since 2003. Today’s report also showed that average monthly wages slid a record 3.9 percent to 315,164 yen last year, the lowest level since the government started tracking the data 1990.
Large businesses cut winter bonuses by 15 percent to 755,628 yen, the steepest drop since the survey began in 1959, a separate report by the Japan Business Federation showed last month. The money is typically paid in December and is often equivalent to several months of pay.